Consumer prices for computer software and accessories rose roughly 14.5% year-over-year in May, the largest annual increase in data dating back to 2000.
Software and Chip Prices Hit Records
The figures were reported by The Kobeissi Letter, an account on X that tracks macroeconomic data, citing the Bureau of Labor Statistics’ May Consumer Price Index report, published Wednesday.
Overall, U.S. consumer prices rose 4.2% year-over-year in May, with energy costs up 23.5%, driven largely by the ongoing Iran War.
The producer prices for electronic components climbed 27% year-over-year, also a record.
The surge comes as hyperscalers, including Microsoft Corp. (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) continue large-scale AI data center investments, widely reported throughout 2025 and 2026.
Chip Shortage, Fed Outlook May Keep Inflation High
DDR5 and DDR4, two generations of random access memory (RAM), have surged 290% year-over-year as AI data centers absorb most of the global chip supply, according to The Kobeissi Letter’s post.
The Kobeissi Letter said the price increases could keep inflation elevated into 2027, compounding pressure from elevated energy costs tied to the Iran War.
The broader Producer Price Index rose 6.5% year-over-year in May, up from 5.7% in April and the highest reading since December 2022. The May Consumer Price Index climbed to 4.2% year-over-year, the hottest since April 2023.
Economists widely expect the Federal Reserve to hold rates at incoming Chair Kevin Warsh‘s first meeting on Jun. 17, though futures markets price rising odds of a rate hike later in 2026.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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